The Adviser Association chief executive Neil Macdonald told ifa the size of the class was likely to be significantly more than the 100 advisers first estimated, including existing AMP Financial Planning representatives that had not been terminated by the wealth giant as part of its restructuring of its advice business last year.
“Based on what we know, a lot more people have signed up,” Mr Macdonald said.
“We know it’s not just exiting planners – some existing planners have signed up because what most of them realised is that if AMP can change the contract when they feel like it, what’s to stop them changing it next year or the year after when they feel like it again?”
Mr Macdonald added that while many terminated advisers had been prepared to engage in the mediation process initiated by the small business ombudsman, an increasing number had been frustrated by the results and felt their only option was legal action.
“We think discussing and negotiating an outcome is a more efficient and better way to do things than having to go through a legal process, and a lot of our members thought that too but most of them don’t feel as though they’ve been getting a good outcome from mediation,” he said.
“The longer this goes on, the more stressful it is for them, and we know a large percentage of [the mediations] are still progressing because they’re not happy with what they’ve been offered.”
If successful, Mr Macdonald said the case would see AMP required to pay exiting planners the original book values stated in their BOLR contracts of four times recurring revenue, and that advisers still working within AMP Financial Planning could also enact their BOLR notices for the same value.
At its 2020 AGM in May, AMP indicated it had a backlog of more than 250 advice practices that had sought to enact their BOLR notices.
A spokesperson for AMP said the group was confident changes made to the BOLR contracts had followed the letter of the law as well as being “in the long-term interests of our clients and advisers”.
“The financial advice industry has transformed dramatically in the past few years, including the removal of grandfathered commissions, new mandatory education standards and higher advice standards,” the spokesperson said.
“AMP has made difficult but necessary decisions to ensure we adapt to the new environment and continue to have a strong, viable advice business for clients.
“We recognise the changes are challenging for many in our adviser network, and we’re providing support to our advisers to help them manage the transition, including those who support the class action.”
The case is being run by Corrs Chambers Westgarth as an open class action.
Full power and encouragment to these advisers in their case. Be prepared for all the legal dirty tricks under the sun, from AMP. They will obfuscate, delay, threaten and intimidate each one of you into giving up. They will burn shareholder’s money in trying to run you into the ground. They have zero respect and regard for morality and right and wrong. This, sadly, has been proven time and time again – just look at the public record for court cases being fought against them by former advisers who thought they had a deal that would be honoured.
And to all the people who still work for AMP – I encourage you to consider the value of being associated with such a morally corrupt organisatin. Working for AMP is very quickly having the same stain as working for a tobacco company. Or, put another way – if every emplyee decided not to show up, would there still be an AMP?
AMP has confused a “right” knitted into some sub-clause…with what is right.
Shame on you AMP for using the opportunity of negative consumer and regulator sentiment towards advisers, whipped up by Kenneth Hayne, to betray your loyal network of advisers and their families.
Certainly a Hall of Shame moment for a major Australian business.
Nothing like changing the rules when it goes in AMP favor and they destroy countless lives, families and businesses. Their should be an investigation into the role the AMP has played in people losing their lives due to their treatment by the AMP Managment and Board. Despicable doesn’t begin to describe what they have done and are continuing to do .
Maybe the whole adviser network including the advisers that have left the industry because of fasea etc should use these solicitors to sue the government in a class action for pain suffering and stress plus the devaluation of our businesses and under the false allegations by the trowbridge report that started all this mental anguish
being “in the long-term interests of our clients and advisers”….. really….how is this in the best interest of either…..?????
AMP are a disgrace.
De Ferrari has overseen this immoral and unethical practice on his watch whilst being paid obscene levels of remuneration from an organisation that is struggling to be relevant, selling off what it can to survive and burn loyal advisers without conscience.
De Ferrari, when much younger, assisted Mother Theresa to build houses for the needy.
It is almost impossible to imagine isn’t it.
Every thing is totally negative in this destroyed industry insurance companies are gutless crooks and politicians are the same
Small fly in the ointment: Will AMP still be solvent if it loses this case and has to pay 4 times BOLR to everybody?
yes
How about a class action against the Federal Government with respect to reneging on grandfathered commissions?
We tried to fund a High Court challenge but not many advisers were interested, many had already moved on unfortunately.
I feel genuine sorrow for those guys sucked in by the AMP BS and who borrowed money to buy a book, now clearly based on false representations made by AMP at the time. The people I feel no sorrow for, are the bludgers who built up a book of trails and provided no service to their customers. Fee for no service. When I started, servicing commission was paid to service the client. Which I did. There’s a bundle of AMP general agents who had cosy deals with corporate super and receive trails for people they’ve never even met, let alone looked after. In my view, the class action should only apply to the poor souls who borrowed. Not the fat lazy bludgers.
Well said and very true
Well said Big Trev. and add to that the advisers arbitraging books for selfish benefit. I too feel sorry for many, but not all, of those affected. AMP should have wound back the 4X BOLR years ago but it was used as a recruitment and retention tool. But reality says that as conditions change so should some the old exorbitant remuneration of “fat lazy bludger” advisers. There will not be a level playing field in any class action because yet again, if its successful, there will be advisers who will get something for doing nothing – as they have for most of their “career”. Don’t just blame AMP because a lot of their greedy advisers are complicit to their own situation. AMP was also weak in not standing up to adviser bullying for fear of losing an adviser.
Interesting sentiment Big Trev. The real problem seems to be that newer advisers who borrowed to buy a book were massively overcharged for it. The reduction of BOLR was always inevitable, as it was completely unsustainable. BOLR should never have been positioned or perceived as a “money back guarantee” for an overpriced purchase.
Surely a better solution to the current problem is to acknowledge the overcharging, and refund around 50% of the purchase price so that advisers who borrowed to acquire a book can reduce their loan amounts accordingly. Undoing the BOLR changes would benefit not only the ripped off newbies, but also the “fat lazy bludgers” (in your words). Perhaps this is why AMP is fighting so hard against it, given the much larger BOLR payouts likely to be required for more established advisers.
The cards are now stacking up against AMP. The media and the public are now very much against them. I would not be surprised if the board are secretly hoping for a second vote against the remuneration report as this will give them an easy exit out of this mess.